folks may develop in this direction. it is all proposed and we will see how it sorts out with -- >> the democrats have this giant trap waiting for them with medicare because they will have the same problem. that is, how do you -- how do you prevent the employer from dumping their sick people into medicare and keeping the proceeds of having a healthier pool and it will be the very same problem but with a different set of players. >> a lot of the employers who want to dump their folks have done so if they were going to. they would be run out of business people, they are still providing coverage despite the hurdles and going there. do we have any further questions from the audience? all right, i will deliver a remarkable feat. i am ahead of time and under budget and we will turn it over

to reggie because she has folks who can talk forever. >> we will switch panels, thank you very much. attention everyone, we are back in session. welcome back to the next stage of today's aei conference on healthcare that matters. real choices for real competition and vice versa. i want to introduce for our

second panel of the day, reggie will be moderating this panel, nancy mcpherson from harvard business school, a lot of firsts and honors, the first to be chaired, first to serve on corporate healthcare and medical technology boards, initiated as a nonprofit in healthcare at harvard in the first selected by the students as their best instructor and a lot of her second and third are on this panel. reggie's work for consumer driven health plans, just this year she was awarded the honorary fellowship and the american college of healthcare executives. these leaders, who we can say nice things about, one of the most influential people in healthcare and she is proven to

be invaluable in developing this conference and the ideas that have fueled it. >> thanks so much, it's a little scary to be introduced by tom. i told him no wrestling images, no pictures of gulliver being tied down and most of all, no pictures of someone with their rear ends sticking out. that was a brilliant moderation and thank you. thank you, so much for permitting this panel to happen. this panel is really about the entrepreneurs who you see here and they are all entrepreneurs who started or were key elements in companies that helped to

solve the problem of the u.s. healthcare system and as brian so eloquently said, is the powerpoint on? i went to mit but they didn't include powerpoint. how choice and competition can help solve u.s. healthcare problems. and the problems that the panel spoke about with those uneven access, despite our brilliant healthcare providers including my daughter who is in endocrinology.

the quality of the u.s. healthcare system, just rapidly going through some of the problems, healthcare costs are exceeding not only inflation but workers earning and of course the excess is taking more and more of a bite out of low and middle income people. it is tremendously worrisome. and the quality, despite the brilliance, especially of our providers and the extraordinary medical technology events that are happening. for example there is a company out of philadelphia that has a drug that eliminates blindness in children with congenital blindness and there are many more extraordinary technology,

innovations on the horizon, nevertheless we leg other developed countries and things that could be treated despite our costs. innovation is possible in other sectors of the economy. for example, the food industry, if you look at the cost over time food used to be your -- you are too young to remember this but food used to be a major item of people's expenditures and it is no longer quite as major of an item. -- has also gone down in cost because it is much more reliable as we are more fuel- efficient and more

environmentally friendly, these are just examples that innovation is possible in a good way, it doesn't just mean you cut costs that costs can be reduced. while quality is increased. in healthcare contrast, medical care, if we look at the cpi medical costs seem to continue rising and quality and because of the cost problem, access continues to be a problem. so how is it that innovation, people talk about it in almost theological sense and there is no -- what is it that innovation does to reduce cost while enhancing quality and

access. let's look at the food industry. one thing that happened in the food industry is access to food became much greater, in 1930 the first supermarket was developed, it was called king :and mr.:had the phrase to advertise his supermarket of pilate high and sell at low. i like that that are the most of the phrases i here. at least you know that he is selling. nowadays, 40,000 supermarkets, supermarkets have become ubiquitous and likely will turn the whole industry upside down and it will become even more

ubiquitous and accessible than it is right now. by amazon i am referring to their $19 million purchase of whole foods supermarkets. there's a lot more choice so grocery stores carry 40,000 more items than they did in the 1990s. the quality is much better, much less processed food, more prepared food, you might think all the choice is overwhelming but when i go to the supermarket and i look at the 50 brands of yogurt that are available, how do i make a choice? all i need to do is pick up the yogurt and it tells me the price, right there, tells me the rda, the calcium, sugar content, tells me things i am

interested in knowing. but contrast to medical care, i need a mastectomy or any of you guys needed a prostatectomy. without being crude, what exactly would you pick up to tell you the price and the quality of what it is that you are buying and how readily available and trustworthy was that information. so these are the things that made the supermarket industry or the food at the home more competitive. so the separate elements when you use production methods and store refrigeration, new ways of preparing food, greater access to food technology, credit cards, actually we will

get rid of credit cards very soon. green revolution in the production of food itself, consumer information, comparative prices, ingredients, health information and consumer involvement, a lot more self-service, supermarkets used to be dominated by clerks who would or would not handy what you wanted, nowadays it is the consumer who does the bulk of the shopping and these are the critical elements in the cost reduction quality improvement and access improvements of food. so, can this happen in the healthcare? yes, they can we have examples of that sitting on the panel. if i shut up you will hear from them. when you are teaching a case where you say to someone what do you think and what do you think about what she thinks she just did with most of my

students. i never get to say what i think , i am almost at the end. what are the sum -- same production methods, 23 hours, it will tell us about it innovative, low-cost, high quality way of delivering cancer care. how about access, cvs, the senior executive vice president of cvs with its 10,000 stores and 1200 clinics, is that right? it will tell us about new ways of accessing care. my friend will tell us about, this will

blow your mind, a new way of buying health insurance. it response to many of the issues raised in the prior panel. consumer information, the ceo of change, healthcare, it's a pipeline that runs about a third of the claims data in the united states. it is coupling those to a terrific consumer information panel and will tell us about that and there is a wonderful change in healthcare, and it is about 500 million, something like that in revenue as the leading telemedicine service and the dock us -- the doctor will tell us about that.

so the theme of the panel is the private sector can work to solve many of the problems of cost access and quality. but, it has to work with the framework where it can do well, what it can do well. so i wonder if you can start us off? would you like to stand here? doesn't this look like space- age? >> just press green? hello everyone, i am tony miller. 16 years ago i was actually here working with members of congress trying to convince them to not legislate plan design. some of you may not recognize that but we started the first health reimbursement account

products in the late 90s, we had 35 companies take them and we built the first what we called, consumer driven healthcare plans. i was trying to convince congress, don't pair with an hd hp, that's a bad idea. you can see how effective i was. we went and hid for a while. i have been working on an idea i will talk about today. instead of grabbing a label consumer driven healthcare, we went out and talked to consumers about how they actually use the healthcare system. we use it, healthcare is terrible at marketing. it is actually good at one thing because we called the healthcare system, it is the illness burden treatment system. if we called it that, people wouldn't want a lot of it. what is interesting is we use healthcare in a way that is

sexy today and it's called on- demand. we use it in an on-demand way. when the need arises we tried into the system, try to solve it quickly and guess what we want to do? we don't want to stay there. it's a health policy fantasy, that is not what we want. we want to leave and get back to our everyday lives and make things work. so we are observing this behavior, we would like to do. great, i want to back up. one of the things we did is i will start with this very productive -- provocative thing. could you make insurance on- demand? i know a lot of the policy people right now are saying that is impossible because what will happen is people are going to wait until they are sick and then by the coverage. and then they have been paying into the risk pool and making it affordable for all. hang onto that and i will

explain how you make insurance on-demand. you have to start with design thinking. if you plan cities for cars and traffic you get cars and traffic. if you plan cities for people and places you get people and places. let's think about some design thinking, if you plan healthcare for annual plans, doctors, hospitals and drugs, yes what you get, that same thing. what if you planned healthcare for treatments, health and caring? what would that look like? it would look very different. i am going to skip this page for brevity, you can grab it later. if you take a policy oriented view, you end up with the wrong thing. for example price control, what you get with price control? i was one of these lazy people 30 years ago. i worked for united healthcare when they were united healthcare and we

built networks and guess how we negotiated prices? anyone want to guess? reference based pricing, we started with i will pay 100 30% of medicare. what that did is it said medicare sets the clinical value and the fundamental things that is wrong in healthcare is not prices. it is how we set clinical value. and i will come back to that in a second. sonata we get because of that, 2/10 higher cost because of a policy perspective. what we design is what if you let consumers take the opportunity? here's the problem with the shared saving programs that we piloted. we missed the third leg of the stool. the plan sponsor saves money in the provider saves money and no one give money to the consumer for making different choices. that is a bad idea. right? we need to do that. i'm not going to be up anymore

on that but i will jump to the next slide. this is the perfect depiction of the problem. this is produced and covers what i call the three c's of healthcare. they are coverage, care and condition. on the left is coverage, divined -- designed and dollars, color of the ribbon is what we call service categories. what are those? part a, part b, hospitals, physicians, drugs. me tell you something, disease doesn't recognize part a, part b, part d, it is a bad idea. and what you see is every goes into the center fusion, that is care, hospitals, doctors and drugs. okay, guess how we actually consume, you go to the right and how we actually consume as consumers, if we consume via conditions, jeff released some hippo this morning and told everybody he was a cancer

survivor. congratulations. that is how we are uniquely tied together as humans. we have conditions. and what is crazy is the noodle soup, see how everything gets bent? when you get to the end and we go and hand the card to a consumer, how many of you woke up and said i can't wait to have more hospital? that is not the way it works. what we have is a condition and we want it solved quickly and efficiently. here's what is crazy. this idea of an acl is the best of all things you need as a consumer. you will get the presentation that shows you and minneapolis, this is the care system about how they perform. now performs the best across all the conditions. so saying i want an acl for all these things is a crazy idea. what you are missing as the thousand points of light that

the fee. service system has, they want to throw everything away. the fee for per are thousand points of light that allow us to innovate and drive better outcomes. so, what we had the opportunity to do was step back and talk to consumers about how they would want to design a healthcare plan. this is how they want to design one. so they said i want to personalize my coverage based on my conditions not on my doctors and hospitals. and i would love to know my exact cost in advance. don't send me this crazy thing that says it's not a bill and say yeah, here's what the charges were but don't worry, we are going to do a benefit adjustment, we got contract adjustment. it's silly to talk to consumers that way. underneath the conditions there are treatment paths. every condition has a multiple conditions. what you want to do is expose those treatment paths to

consumers. so, i have back pain. i could solve it with physical therapy for a very simple co- pay of $35. i can solve it with a back pain injection, it could be stare out it was something else that cost $50 or i could get a spinal fusion done. guess what? very expensive, how many of you want to start with spinal fusion? that's the other thing that's crazy about this idea, which is humans hate anesthesia and scalpels, they want to avoid them. but someone needs to expose them to the alternatives. so, guess what, there's a specialized rehab specialist in your area. guess how much they charge for that? zero. just get the consumer to buy that releases actuarial value to the entire pool. then what would happen if the consumer doesn't resolve what the underlying condition is,

they then would get a spinal fusion. but now they are going to a center of excellence in their area but now they are going to pay it now instead of would have just jumpsuit. this isn't so crazy. the modern world we live in. i am going to put health insurance on the modern deck stack. that's the wrong question. the question you should ask yourself is what is the modern text deck? what allows you is to let you determine what the consumer needs and then deliver that precisely when they needed. let me give you some examples, this is true on a bind analysis that shows will unlike actuarial value. if you start an orthopedic procedure with pt, what's the surgical rate if you start with anything else but pt with the surgical rate. they are almost double across all these conditions. almost double. can you imagine a number procedures that are doing --

done across these. oh, and by the way, here's how you make insurance on demand. we are all in employer group, we are all subsidy desha subsidizing each other's buying habits. i would ask you don't take your meniscus scan, please start with pt. you're going to save me money and save you some money and probably save you a bunch of pain, too. make sense? here is why you can make insurance on demand. what has every employer done over the last six months? they have built a forward budget of their health benefit liability. it is forward hundred. there are these two other institutions that do that, too they happen to be medicare and medicaid. so we have trust funds, we have forward built or liabilities. what is really scary is what is the algorithm we are building -- using to build without

forward facing budget? how many of you have had the same healthcare year after year? that is a bad algorithm. i talked to my actuary friends and i stayed you are the first data scientist and you are the last because your algorithm stinks. and what is really important is they have something in the computer called markov properties and we can better predict what people need using a machine learned view of disease. and when you do that you're going to build coverage that looks like this. you're going to start by saying let's get back to insurance, let's actually have something we called core that meets the aca requirements. guess what else doesn't happen in a bind plan? no deductible, no coinsurance. ever. they force consumers to do fuzzy math, that they can do, -- can't do.

after this happened the whole idea of transparency i'm going to get people shopping is a stupid idea. okay? so the only people who have the data necessary to do that are insurance companies, intermediate like chains who actually look at the practice patterns of what people actually do as they produce and deliver the services. then what you're going to do is create a derivative of that price and take the risk associated with what you're supposed to do as an insurance company by building a single price point. this is why you don't use a deductible. health insurance is only a 100- year-old concept in this country. it's fairly new. deductibles and pnc work built for specific laws events. her house burned down, you got coverage. but your health policy didn't cover your business loss. deductibles and healthcare mix laws events. i am mixing my pediatric diabetes with my broken leg,

with my myocardial infarction. it is a really, really, really, i'll say it one more time, bad idea. hopefully this next time around, this next congress, don't do and con hdhp. so you take that employer's plan and you say i'm going to allow people to buy anything when they needed, if they need it. and when their needs change they can buy what they want. the key to that is healthcare is plentiful. how much of healthcare is plentiful? i.e., the treatment. anyone want to guess? over 70 percent is plentiful. right? events aren't plentiful. cancer is implantable, no one plans for cancer but when you get it you can trick plan the

treatment paths. and when you plan the treatment paths you can start putting price tags all along the journey what the consumer wants to do. and then you will also be able to reflect what is this, knee pain? i will cover this with physical therapy, or knee pain injection? you are buying this and for example i give you a hospital or you are buying it from the afc. and the price you're going to pay, the consumer for the atomized coverage is going to change based on the clinical value in the price of those underlying services. and you got something very unique for the first time in healthcare. you're taking a coverage decision with the clinical choice and you are marrying it to the point of need, not the point of enrollment. the point of enrollment is a really scary time for consumers. why? because you have asked him to do three jobs. one, they want you to become an actuary. two be a clinician, based on figure desha is figuring what you are going to consume and

then three be a fortuneteller. predict the future. no wonder why people are all upset. if you could make insurance on demand and take that clinical and susan i am now an active consumer. this is what it looks like, this is how we use it. an ai engine that converts every consumers synonym for what it is they need. won't if you want to know when an ear infection is, you say yup it's covered in your plan and then we show you how it's covered. depending on where you go with that, your prices change. if you go to something like tele-dock, it's going to be free. if you go to the convenience clinic it's going to be 15 bucks if you go to price care i'll tell you why this arrange in just a second. if you go to the er, it's $500. don't go to the er. i have seven kids i know how to diagnose an ear infection i

don't need a doctor to tell me what it looks like. the difference in primary nursing and who you pick and so billed as an episodic deal. talking about their cpt horse i'll be grabbing one form over another. and so i'm still forced to still price fix for consumers. and we just give the consumer a price certain tag that is all you are going to pay, no matter what happens. here is how we build the prices. this is real data from the minneapolis twin cities market on variation on that procedure. if you want to get the one that is $2300 from united hospital, then there's the bar over there on the right that's about the market need. and that is how we all have to price, right? and what binds us is no, i go across subsidize market.

i had the subsidy to the higher performer. i make it more affordable for everyone. nudging the consumer to get to the right thing. here's the thing that's amazing about a line plan when you get a raise come you pay less for your healthcare. now, when you're at this point a decision you have to decide if you are getting your pay raise to a bloated healthcare system. if you want to give it back, knock yourself out but if you want to keep it, we will get you to buy that most cost effective alternative just below that. this is how the buying plan forms for people, this is us, this is the winners and losers for the people in the audience. and we show people a 2000 member group, and we show people that do better on the buying plan and then people that are doing worse now it's not so good when you have condition based design is. i can cover all the things

you're worried about efficiently. now what is all those things you can plan for where there's a lot of price variation and you can shop for better, i'm gonna make sure i nudge you north of that line. i am going to make sure, and what's interesting about this actuarial plot is traditional plan designed can't push people passed the 50 percent tile. you got into your out of pocket deductible max penn desha's plan. very different concept. we can drive to anywhere between 15-20 percent savings for employers, and what's really interesting is we are really achieving, but we are not bending the trends, we are breaking the trends. and so we see a third of what they previously spent on their other insurance products by putting it in a buying plan. thanks.

[ applause ] >> so, tony miller among his other accomplishments was the first in the united states to successfully develop a platform for deductible healthcare plans against really formidable much deeper pocketed competitors. so great, tony. our next speaker is tom moriarty, he's a senior executive vice president of cvs. he is in charge of policy, and we had to have a token lawyer on this panel. not so token by any means, tom will tell us about how cvs will solve some of the issues alluded to in the prior panel, and that is how do you break care out of vertical hospital integration that you talked about so eloquent dashes

eloquently, barak. so, tom? >> thank you. so, we have a presentation, too. >> yes. >> green button? okay. there we go, okay. good morning everybody and thank you for the opportunity. i think you will hear some very similar scenes from me that you heard from tony as well. but i wanted to spend a few minutes to talk to you about sort of the thesis of the transaction that we have just completed with aetna and how we are going to bring it to life and how we are going to bring it to the marketplace. because i think that access point, the need for care and local care is paramount. and we have a fundamental belief that the healthcare system can necessarily be evolved from outside the change has to come from within. and we are there now and we are changing what we know when using data to drive that change that's ultimately what we are

going to be looking at. so if you look at the current system, obviously everyone knows the challenge. the current system is fragmented, it's complex it's episodic and obviously very, very wasteful. you all know the stats in terms about how the us performs against other markets. that is staggering is that this country has a 3.2 trillion dollar health economy, it represents 18 percent of our gdp. and over the next several years it's going to go up to about 20 percent of gdp. those additional 2-point increments is $250 billion that won't go to education, infrastructure, or other key national priorities unless we change. and start looking where cost is, why we have increased costs. the current system is not sustainable and it needs to be transformed. so our vision is really a new front door to healthcare. so in the introductory remarks we have almost 10,000 locations across the united states. we feel that as you build

within communities, healthcare is a full contact sport. it takes a number of contact points to really address the issues at the patient level, at the consumer level, and to what tony said, the system is built around the consumer and we need to change that. for the so that the consumer and the patient feel empowered and have access where and when they needed and how they wanted. and so we believe we can improve engagement, improve outcomes and ultimately because of that increased engagement, lower healthcare costs. the priorities, the local. we are local. make it simple. we really need to break down, bring transparency. i think one of the things we have done just around drug pricing alone, we have the ability today, based on where you are in your plan design, at the doctor's office or at the pharmacy counter to tell you what your doctor has

prescribed for you and show you lower cost therapeutic alternatives. up to 5. we brought that into the doctor's office with the existing emr systems. so when your doctor wants to prescribe you drug a, she will see where you are on your co- pay, lifecycle, etc. if she prescribed drug a, it's going to cost you x. and down the list and get you to the lowest price therapeutic alternative. and you can have a choice as a consumer. and it it is not done at the doctor's office it can be done at the pharmacy counter. to working with a lot of the players that are represented today but more broadly in the system it's leveraging capabilities but bringing that ability into healthcare that is usually important. and so we have five priority areas. common chronic disease management, we all know that lack of adherence to medicines roughly $300 billion a year is wasted. because we have emergency visits, doctors visits and unattended outcomes because of

lack of adherence to medicines. i think it's roughly 90 percent of all disease conditions at pharmacy and pharmaceutical products as the first line of defense. but when a drug goes through a clinical trial at fda you have adherence rates that are off the charts, 98-99 percent. why? because the care management system built around the patient during the clinical trial. the drug gets approved by the fda goes into the open market, adherence for that drug where is 98-99 percent in the clinical trial drops below 50 percent. how do we replicate in a meaningful way what has happened in the clinical trials into the real world. and that's were locally access information and attended cares becomes important. everyone knows it when you went to the hospital you have a drug regimen that has been prescribed to you when you leave the hospital. there is nobody there to do the medication reconciliation for you as to what is currently in your cabinet at home with what has been prescribed at

hospital. a big percent of readmissions, drug to drug interactions, because that reconciliation is not being done. other areas, have therapies that are being transferred from hospitals into nonhospital settings. infeasible therapies, for example. and better manage that transformation the lower rates of readmission, the cost savings are huge but more importantly, the patient experience improves in a credible amount. site and care management and this was referenced before, unnecessary er visits and other visits cost the system a tremendous amount of money, both to the system itself and to the consumer, the patient. roughly 50 percent of folks coming into our clinics do not have a primary care provider. roughly 80 percent come to us on nights and weekend when primary care is available. we need to extend access to these alternative sites of care. a, to provide that access but be to provide lower-cost sites of care. optimized primary care, this venture will be an extension of primary care and to providers,

it's not a replacement. there are other models that we are looking through, this is an extension. and the one statistic i use here just to demonstrate this point, we know patients with diabetes see their position roughly 4-5 times a year. they will see their pharmacist and talk to their pharmacist 18- 24 times a year. so how do we leverage the information that is in the medical records that is in the patient record, to drive to maximizing the the point of engagement? when the consumer when the patient wants to engage. it's not the phone call at night at dinner time. it's not the letter, it's that race to face contact with the care provider that is available. that is fundamental to what we are talking about here. in a complex disease management is the last area of care. and fundamental if you look at 10,000 folks each day, we know what that means budget wise as we go forward in terms of the

cost impact. but also as we get older, unfortunately we develop multiple conditions in the management of those, very complex, how do we bring engagement, information and transparency to do better job in that regard? so why do we think we can make a difference? well, today roughly one in three americans interact with cbs today. over 75 percent of the populations within five miles of one of our pharmacies, little bit more than porn a half-million folks come to our pharmacies each and every day. and now, it's aetna, we have over 45,000 medical professionals who are going to be available across our enterprise. we have folks engaged in text messaging, which is now the power of your phone. i think most importantly is the interaction engagement we have with health plans across the country. so, as we look at aetna and bringing this together in innovation, because of the channels that we interact with today, we have a really

distinct possibility to leverage and bring this to market much more broadly and really drive change across the entire system because of those existing relationships. so, this is the problem statement, we all know it. 2 .4 trillion. that the medical spending, estimated 2 .1, just on chronic disease. and these are estimates that are published but if you take a 25 percent estimate, that drives to a range of savings. and if you think about what that savings can mean, just across the board, not just from a cost perspective but from a patient experience perspective, then you are really gnarly -- looking at the rate. but if you can't make data actionable and bring it to life and bring it to the patient, bring it to the consumer, not really going to change the behaviors that need to be changed. you're not going to drive the change in behavior that needs to happen and you're not going

to change the way the system currently works. so that is the cisco we're going to be building. we firmly believe that we will make a difference. we have a number of proof points from our cvs world that i think and make a real difference. and one of those, is the way the current payment systems are structured and its annual cycle. of essentially bidding for lives that we have both in the commercial world as well is in medicare. we need to make investments in patients that extend beyond the year before those benefits are actually seen and achieved. we should be looking at underwriting cycles at the federal level and even at the commercial. we create different levels for those investments to be realized. you are saving and driving the change. so i hope we get to some of these questions. thank you. [ applause ] >> so, often what people think about cost control, they think about controlling.

i think what tom illustrated that it is not about price control, it's about delivering fundamentally in a different way. i did invite a health insurer who offers a 3-year policy and the number 3-your policy is of course very important. 1-year term, and that's for the length of the contract. it's insane, especially if you're dealing with chronic diseases. it's like buying a house with a 1-year mortgage. in brazil, this particular insurer offers the 3-year policy so the insurer has more incentive to maintain and improve the health of the person early on so that by the time you're 3 rolls around, you

have reduced the turn enormously. where people are coming and entering health insurance policies is very expensive. unfortunately, he couldn't come so you're stuck with me telling you about this amazing plan. very interesting. in breazeale, why isn't it in the united states? we will return to that question. our next speaker, doctor rajiv bhatt is our next speaker. he is involved with innovating the delivery of cancer. and again this isn't medicare, it's not any of those things. these are fundamentally innovations, the old-fashioned way we have done it in the us.

and that is, we have changed how we produce things. >> good morning everyone and it's a privilege to be here. a big thanks to regina. i'm basically a physical oncologist and clinician and in part a medical interpreter as well. so you get to see a bit of both the worlds. hcg is a cancer organization in bangalore. and it's a doctors initiative organization. it is driven by doctors. and, it's the largest cancer

care provider in the private sector in india, with more than 2000 beds. 60,000 new registration, cancer cases seen every year. last year we performed 18,000 major cancer procedures. radiation therapies and more than 50 thousand chemotherapies through a network of 26 cancer centers. we keep financials there for all of you to see, they are fairly strong we have revenue within us dollars with good plan. the company went public in 2016. current shareholders are both national and international and cdc being there as well. so, it is a fairly universal

organization and doing well at its initial stock offering. but what is instructive here is to see the evolution of hcg and how it happened. it began in the earthing dashes early 1990s and trained at the anderson here in texas. and he, along with a group of doctors set up india's first private dedicated conference of cancer facilities in bangalore. now this was against the background of an area that procedurally was lacking in appropriate infrastructure for cancer treatment. in the quality of care that was being delivered with quite substandard. and it was generally accepted that cancer was unprovable and and end-of-life disease. this particular set system was set up and in a few short years, people started with so

many patients that they were essentially looking for expansion so there was a need. people did want better quality cancer treatment and it was in the early 2000's that the company hcg was formed. and again it was in the background in a lot of instances about how the capital investment would be recovered, because it was capital- intensive to set up a high content cancer center. and what is the viability of a single for charity entity? because we used to go to major market specialty hospitals which oncology care would be a sub part. so against this background that the expansion planned, it was put into place with uniquely innovative models that we shall speak about later. and from there to today, as i told you we are the largest cancer provider in the private sector with 26 cancer centers. but now the background is the

rising incidence of the disease and there is a huge gap in the care and the resources. and we clearly needed him in the outcome. so the challenges remain and it is a dynamic and chance -- constantly revolving area. 80 percent of the care is in cancer, a small part in fertility treatment, precision medicine through the strand verticals, and this is actually a vital part of the entire organization because it provides the informatics and the specialized clinical diagnostic and research services within hcg. and there is a very small percentage of multi- specialties. now what you must understand is that india is very diverse. in terms of its language, its

people, its culture. as you go across india, it's cuisine, everything. and healthcare is no different. healthcare is also very different. the amount of healthcare that is in each of the state does ranges from low to average. there are very few states that have a good healthcare expenditure. and it's surprising that the most popular state dashes populous state had the lowest concentration of insurance. so it is an extremely complex and diverse situation in the country. and add to this the disparities in the rural and urban healthcare. almost 2 thirds of the area live in rural areas where there is a significant lack of resources. and only a small percent of people have access to high- quality care. in addition, 70 percent of the

care in any healthcare condition in india is within the private sector. only 60 percent of the patients have insurance. the majority will pay out of their pockets. and that is where the choice and competition will come in. because it's their own money, they will now have to look around to see where to get value from. and in order to approach these challenges, hcg came up with this model , which addresses both accessibility as well as affordability. and what this model is, actually, the group has almost 320 oncologist in various specialities spread out across the country. i can best describe this by giving my own account. i am a surgical oncologist. i practice in a city in western

india. and i started practicing in the mid-90s after being trained as a specialized cancer center. but without the leverage of a comprehensive center within my own city. and this led to a lot of fragmented care. my patient would come to me for surgery we would go to hospital and they would go see another medical oncologist for chemotherapy and they would have to go maybe to mumbai or to other centers, which came up subsequently which was still about 100 kilometers away. so clearly there was a need for establishing a cancer center. as an individual i didn't have the necessary resources to be able to afford this enterprise on my own. hcg, on the other hand, have the expertise and had the necessary financials.

but what it didn't have was local know-how. so it made a perfect win-win situation. these two segments partnered and we brought a comprehensive cancer center in about two and half years ago and how this model works across the centrist. if there are partners in the partners are oncologist himself. and what it does is it brings much-needed high-tech care within reach of people who actually needed closer to their homes. and there are marketable ways in which we utilize this arrangement. the hub of course is bangalore and what it does is that it moves care from the metros to the tear number to and tear number three cities. if the patient has cancer they come to a treatment center with two or three family members you have loss of wages, there is a

tremendous loss of income, so when you transfer the care to the tier number to an three cities, you make it more affordable. and the quality of insurance and the rest of the protocols which will determine adequate level of services is given from the core of the hub to the various books. so, that's how it works and this is the spoke were we have, just for illustration, for oncology we have a modern radiation therapy, we have medical oncology, we have the nuclear imaging and we have lab. but for things which are more intensive like molecular oncology genomics, or for robotics we will look back to the hub. and a short time out there, benny with the center, we suddenly realized that people

within the radius of about 200 kilometers also found it very difficult to keep coming back here for repeated consolation dashes consultation. so, we started our treatment clinics like these dashes at these various places. do lab tests and infusion centers for the chemotherapy. so now you have the spoke of the model extending further scoops -- spokes into the rural and urban areas. so what happened is that the spoke comes a regional mini hub. and so what happens is that a patient that is at the right end of the spectrum can avail of all the quality of care, the benchmarks that the hub is there to provide. so in effect, they are getting the treatment thousands of miles away at a much more a cost of -- cost effective price

point. you can see that the coverage area is fairly large. it covers neighboring areas and states and it has turned into now, the spoke has turned into a hub. what are the qualities of the spoke up? and i would say that it cuts down the cost of cancer treatment. and as you see a conversion of the cost of cancer treatment for various cancers across the board, you can see that the cost in india is considerably lower than it is in different countries. and this particular cost- cutting has happened in a number ways. it hasn't taken away from the quality, as i will show you. the technologies, although they are all very much there are not as expensive as they are in the

us. because a pet scan is to thousand $500, and in india it would cost $300. moderation therapy which is one of the specialized therapies cost $10,500 in the us. but it's just about the -- $2500 in india. surgery, $45,000 in the us, $6000 in india. so clearly there's a value for what is being done. and the other interesting thing here is that even within the hub and spoke model, the costing at the spokes would be less than it would be at the hubs. so, the consumer or the patient so to speak has a choice of where to go to get that level of care, because he is being dashes paying out of his pocket. cost-cutting doesn't come at the cost of quality. we focus on the outcomes and we publish results that show that our outcomes in a number of cancers are most comprehensive

cancer centers across the world. and for number of ways in which we ensure quality, one of them is the multidisciplinary approach. we have a regular tumor board held every day that discusses our patients imaging and lab data. and then we work on treatment plans and that is implemented. complications we would discuss and the specialists at the hub. and this allows us to access that patient with at our center the best decision-making process. we build in the imaging, the date of the molecular, the genomic data that may be required in all this produces a huge amount of data and data analytics which helps us make better decisions. and this focus on outcomes ensures that we don't compromise on quality. if the pharmacist is at our

actual meetings, you can see the adoption of conversion of surgeries with this kind of model. over the years about 10 years and now we are at the same rate as the rest of the world. another particular example is an effective use of the pet scan. this is molecular imaging and previously when we relied on traditional imaging or mri is, we would admit patients who had metastatic disease. but now, with the pet scan we can take the differences are almost 5-4. and that will change the treatment plan. patients who might have been subjected to regional treatment plans, we would know that they had small metastatic disease but they would relapse very soon. the entire effort, in terms of the money and everything else

spent would be totally wasted because the outcomes are totally different. but a simple strategy of using the appropriate investigations effectively, not blindly, more rationally will clearly lead to cost savings in terms of what we do. we have now moved from an era of one-size-fits-all to precision medicine. we have patient subgroups and we can dedicate to certain treatments and it is then that we decide what type of treatment that person will receive. so the outcome is better. there is no point in applying costly medication to the entire group of stage 1 breast cancer is when you know within that group that about 5-6 subgroups exist. so this, really all it means is giving the right treatment to the right patient at the right time. and by doing that itself, we have cut a lot of costs.

and, using this precision, we can leverage adequate resources, we can provide innovative offerings, we have one of the largest cancer depositories and databases. and this is what we will dip in to give us future direction about where we should go. the information system and the cloud-based emr provides adequate data for when we do the analytics to provide a background for real-time decision-making. and this is something that we are now in the process of implementing. it is possible in my clinic now to know that in the past, so many thousands of patients treated in similar ways at this particular type of outcome. and would advise my patient right there in the clinic please don't use these analytics, it's not translocated from the western word excess world. so clearly, this model is

working well. and i will conclude with a quote from a champion crusader of equality and justice who said that:of all the forms of inequality in justice in healthcare is probably the most inhumane and shocking. now lady -- ladies and gentlemen, that was martin luther king. thank you for your attention. [ applause ] >> so, one other thing about hcg, they don't pay dividends and they take that money, this is a publicly held enterprise, they take money that would normally be paid out in dividends and use it to subsidize people who are otherwise unable to un-fordã is unable to afford it. i would dislike to restate, cancer is expensive, equipment

is horrendously equipment, 50 million, $200 million. it requires extraordinarily modern expensive resources to run these machines. they specialized in calibrating them and all of those resources are in that hub and they maximize the utilization of the hub. the resources of what is called medical oncology and fusion, which takes a long time, it's a very painful, psychologically debilitating, both are done out in the spokes. it is economically a brilliant model, especially to a country like ours where we have mostly hubs and virtually no spokes and it's a much more humane model. so thank you, so much.

lewis, you're going to tell us, lewis is the cmo of tele doc and it provides information to consumers and you will tell us how it works and perhaps how it could help if hcg were in the us, could a patient pick hcc -- hcg or another? doctor? >> thanks, regina. on the chief medical officer at teladoc. i am my own journey into telemedicine really began about 18 months ago. i was the chief medical officer at a company well known to reggie, best doctors, one of

the k series at harvard business school that you taught along with another doctor doctor josi halperin. it was a expert medicine opinion service was started by two professors, and that was really a way to access top level medical opinions anywhere in the world. so we are a global company. an 18 months ago, we were acquired by a very large telemedicine company called teladoc. and the division of the -- the mission of the company right now is with the mission of those doctors and acquisition this year of another expert medical opinion company that provides physician services globally, headquartered out of barcelona is really to provide a very comprehensive medical care virtually. and this really sets teladoc

apart from a lot of the other telemedicine companies, which tend to be more or less what would be considered point solutions. so you might have a tele nephrology program that might be helping individuals who are on home dialysis in cleveland. so to very specific use cases if you will, and with the thesis of teladoc is to provide comprehensive virtual services globally. so i want to share with you little bit about the company, but i also wanted to share a couple of thoughts reggie asked specifically about what can be done to sort of accelerate growth from a regulatory standpoint. so i want to address that as well. we are transforming how people access healthcare around the world. people talk about convenience, outcomes, value and i would also like to stress having

taught in the past few years it harvard, access and quality care, not just accessing convenience care. and i think it's an important distinction to bring out. we are in our space in the us, the only us publicly traded company and we have access to over 50,000 medical experts. we have 2000 employees around the world where we are currently in 125 countries. and we have very good uptake in terms of individuals downloading the mobile app. why is that important? it's important because it really drives digital engagement and a lot, currently we are living in a world where consumers are increasingly in their lives, accessing services such as amazon and huber without even thinking about it.

yet with healthcare i would say people are still thinking in terms of i've got a problem, who do i need to go see? and they're not thinking so much in terms of a virtual solution to meet their healthcare needs and that is why the digital download is so important. that allows all different types of digital geo-fencing and all sorts of strategies to really increase the up take of the service. and, as you can see on the slide is a very expensive clinical service. so another important part of the company in terms of the overall digital consumer experience, to make that experience an easy one. so it is by no means the object of the company to confront the consumer with your other 20, 50, 100 services you might be interested in, but really to

work with companies around the ai solutions and have smart intelligence around the navigation so that in a couple of sentences an individual can describe what is their healthcare needs and then basically navigate to the virtual service that we think can best meet their need in that time. >> and here you can see a little bit about the company. >> we really feel that we have managed to deliver virtual care value at scales. so we are coming into a busy season in the us, and on a given day, we may be doing over 10,000 visits. we will doing over 2 million virtual visit this year alone and it is rapidly growing. so, when we look at how many members have access to our services and how many visits are we actually generating, we are noticing that year-over- year on a percentage basis increasingly, the visit rate is out pacing the membership

growth rate. meeting higher utilization higher updates. and you can see her on this slide that we are around 6.3 percent in terms of overall utilization and we have many different distribution channels both large and small carriers, small, medium and large -sized companies but we can see the largest it's thick there in terms of where you get utilization of up to 15 percent, it's really where we can, most directly communicate that individuals have the service. so for instance, for large corporations where we have been brought in as an employee benefit, we have the most direct access to the individual as opposed to when we might be behind the carrier it might be a little more difficult to get the message out. and, we are very proud of the

outcomes. we have done a lot of work around asking each of the individuals who come to tele doc , what would you have done if you didn't have access? would you have gotten a box of tissues and therefore this care is totally additive, or would you have gone to see your regular primary care provider, urgent care, emergency room? and we also do follow-up on these cases. so where we have been able to demonstrate is the approximate cost savings of $472 for each of the visits, based upon that avoidance of er and urgent care. and we are also noticing 92 percent of the member issues are being resolved by the service. so it is by no means additive or another thing where the other person got there medical issue resolved important point. similarly, we have a pretty robust behavioral health program, which actually is 10

times the size this year as it was last year so we are very proud of the fact that behavioral health is going quickly. and it's effective. so we do surveys of individuals in terms of how well this service actually improve their behavioral health condition and we are noticing important improvements both in terms of depression and anxiety scores. we also have the expert medical opinion services. and these are the services that were part of the legacy best doctors and advanced medical and these are services in which virtually we are interacting with individuals, and then gathering all of the relevant medical information. hospital charts, imaging, we actually repeat the pathology to make sure that the original pathologic description was correct and we are finding about 20 percent of the time it

is incorrect. we also do cost analysis on all of these cases and fine that by giving individuals the right diagnosis and the right treatment path, we are able to have a significant impact. most of the model in terms of the expert model dashes treatment systems are delivered as benefits as well as deliver through a lot of global insurers. but we are also locally involved with health plans directly. so for instance, your first a large plant in the baltimore area has a pretty robust patient centered medical home program and the expert medical opinion services of teladoc are services that are then routinely, the case managers are taking their cases at the top of the pyramid, if you will, cases that are the most costly and time complex and

tying them into the network. in terms of couple of different thoughts in terms of what could really help accelerate the growth of virtual care services, i would say two things. one, interoperability. we hear about india and the frustration you faced in terms of individuals who might need to have that as part of their comprehensive cancer treatment. a surgical approach, a radiation approach and having three disparate systems in india that didn't necessarily talk to each other. and really, the smart approach of having this kind of integrated hub and spoke model. well, i invite anybody to come to boston, stand on brookline avenue and you can see on your left-hand side the hospital on the right-hand side you can see

beth israel medical center. i have had admitting privileges at both hospitals for the past 30 years. don't share information. so it's crazy that in this day and age that one could literally have a severe headache, be hospitalized for a few days, get discharged, show up, get frustrated, i'm just going to go across the street go to another harvard-teaching hospital and not have that sharing information. so i think that a lot of the solutions that we have been talking about today, one always has to think about in terms of interoperability and the importance of that. because it really filters into every single conversation. jeff was mentioning earlier about the idea, you could go to a different imaging system and it could be a fraction of the cost of the first place. well, if at imaging center doesn't share information back to the primary care doctor, if there is an incidental finding of carcinoma on the mri that nobody was really looking for

and then it gets bought is problematic even if the consumer gets $100 because they did the right thing and drove an additional five miles. and similarly with fine health. i think it's great that one could be directed to that provider that is providing the knee surgery at a fraction of the cost at the big university center. but again it's that time in of the information, we are proud of our partnership with cvs. and all of the work that troy brennan is doing in terms of trying to tackle our chronic disease management. correct, yup. and we have a partnership with cvs where we are being white labeled and providing basically the telemedicine services for the virtual aspects of the clinic. but i think that the relationship can really accelerate and grow with just

much more of a doing. so i think that everybody knows the ease with which you could go and speak to a financial advisor and, fidelity net benefits and have all of your various tie craft and all of this year that, all on one page and then you could go speak to any financial advisory you want. and i think there really does need to be just the idea that you own your healthcare and you can go anywhere within the healthcare system and seek that care because i that really is on a medical quality basis really fundamental. more toward the telemedicine, i think that two things that are important to us, well there are many things, but two i would like to highlight. one would be around the rules that are currently before

congress that have to do with regulations having to do with where is the patient and wears the provider at the time that the telemedicine service is being rendered? doctor david shulkin, recently joined the medical advisory board was the secretary of the va and i'm sure a number of people know him. and he shared an anecdote where he basically was in the white house demonstrating to president trump, speaking to one of his patients and trump enjoyed interacting with the patient very much. and then, he basically wandered into trump's office and said mr. president you have a minute? he said sure, what? he said well, that patient was in a healthcare facility when you were interacting with him.

and the importance of that is that currently, the justice department is blocking us from enabling our providers to interact with patients when they are at home. so, veterans are literally driving an hour or two to get to the health facility in order to have a virtual interaction. so the president was like that, is ridiculous and he was able to call up adjusted department and get that turned around. so the kind of law of where is the provider still exist so we believe the virtual care should not be provided by those kind of rules. we also believe it is time that people begin to ink about what we want to do with state life insurance. so currently for individuals who would like to work a little bit

sure, my pleasure. >> annexed speaker is neil, -- our next speaker is neil, changes the new name, which is a pipe that does claims processing of about a third of the insurance claims in the united states, and bought a little company called change, changes purpose is to enable consumers to use this voluminous amount of price data, to make more, better purchase decisions for themselves. neil? thank you for coming. >> thank you and thank you very

much tom for the opportunity to speak to you today. as professor herzing are mentioned are companies, green button, right? there we go. there we go. company has been around actually for about 40 years really started out and producing an electronic format a lot of the main transactions in healthcare around administrative and financial transactions and ultimately grew and i will talk more about this at facilitating clinical data and as we all may remember we spent $32 billion in this country over the last decade or so, creating and financing the growth of electronic medical records such as now they are fully in the inpatient setting quite so much in the outpatient or rural setting but we are getting there, which really

digitizes it to some degree the final mile in healthcare and so, this is a company that actually really touches most of the major players and almost a lot of the minor players if you will, sometimes i joke, we take care of one person chiropractor offices and i am sure there is this aromatherapy that is paid by an insurance plan we send them a check as well so we deal with a lot of healthcare and some of the folks that have spoken today we have extremely innovative people, like the project that tony mentioned and a long history of innovation, the industry like cvs and no cvs but there is a long tail in healthcare and we frankly take care of a lot of that longtail to about 14 billion transactions and as professor herzlinger mentioned, something i want to talk about is cost transparency

and patient experience both of which are enormously highlighted in the report that came out yesterday from the secretary of hhs, the treasury and labor department i am here to talk about as brian mentioned earlier, are concentrated market, our number was 90%, it was but noted to the number in the report that came out yesterday was 77% i will probably have to change this slide but it really point out a couple things, when markets are consolidated, there is actually more turnover deeper making decisions about divisions and sometimes, people feel by and large, patients are satisfied -- dissatisfied with their patient experience, it does not mean necessarily their provider or their insurance but it is overly dissatisfied and they will go on about the burden on consumers canoeing to advance, one of the things that we thought about is looking at how we needed to improve the

patient experience, who is actually doing this, we talked about the patient experience like it is a little bit of a black art but we had some people focusing on the consumer experience not only in this country but around the world, for many years. as in other industries, data has truly become digital. financial services, retail, many other industries. so we had a joint effort with adobe and microsoft around improving the patient experience at scale, all the way to the largest healthcare institutions in the country, all the way down to very small providers who are just figuring out how to use the internet to get people to come back to their follow-up appointments which i got to tell you in many small places, occupies the numbers amount of their time and there is an advanced industry that you may have heard of which is called the telephone which is not always the best way to do that, we have a large scale, and companies here, we process i mentioned 14 billion transactions each year and i one point where the senior executives of adobe listen begone about this said how many

transactions do you think we saw from consumers in adobe experience cloud last year? i didn't think this was going to go well for me but nevertheless i said i don't know, how many? he said 233 billion. could you please shut the heck up about your 13 billion transactions, consumer experience is a lot bigger than healthcare but some people have not figured that out yet, so this is something we are excited about rolling out, we announced it last year and is getting a lot of traction in the market. the other area i wanted to talk about briefly is around efforts around data and price transparency, price of cost transparency, so some of you may be aware back in march, and administrator had an announcement at our conference which was a big i.t. conference for the healthcare industry and talked about the next stage in blue button, downloading data from the va, programs to provide even more access to data that is controlled by hh f, the va,

other government or connected entities, professor herzlinger is specifically familiar with the company because it came from our company that we bought four years ago called change healthcare, this name be adopted because i thought it was a very cool name. and this product called treeview which i will talk about which is one of the largest footprints in the country, for providing price and cost transparency data and we heard interoperability mentioned a few times and some of the folks that are familiar with how this has advanced in the country, maybe aware of this commonwealth alliance that we provide the network like many of these network businesses, the interoperability of clinical data which has not quite in -- quite gotten there yet is advancing but like many network businesses it starts very slow for a long time and then you hit the knee of the curve so the common wall network is now sharing information for over 39 million individuals is literally just in the last 12

months after four or five years of work by the way, and now it is increasing by almost 2 million a month, so like most of these networks and businesses once you get a two- sided market and the network and the extras, it really starts growing in with the 21st century act and further, encouragement through legislation there and some of the new aspects coming out of washington, we expect this interoperability area to continue to advance very rapidly over the next few years. finally, some of the data that i know tony shared some great data, what he is doing and what cvs, they have an enormous amount, this true view price comparison which was voted number one by this organization that ranks healthcare soft wherever your called class, some mentioned earlier about the design, i think we may have one of the largest in healthcare, the head was the head of design of bank of america, so if anybody here is a bank of america customer and you use the application, he did

that, this is the scale and how to understand design thinking, the people we hire, stanford, combined with an ai group which i think is also one of the largest in healthcare, and a bunch of behavioral economists that we hired from various places you get behavioral economists that, really are combined in understanding not only how to produce software, that is usable by people, and let's remember the average american reads at a seventh grade level. for this interface, it is not an interface meant for health experts it is for john and jane the public. you have seen the data and others on the panel reduce costs are likely to shop, in the report, those of you who haven't had a chance to read the report that came out yesterday, i mentioned this, they talked about shippable services, imaging which someone mentioned is a great example of that, where the ability to help people be better shoppers, we now have examples of this and all the customers i have been

using this for years and so i think this is a good example while we will certainly have people innovate that will be truly transformative, we still have as we said earlier millions and millions of people involved in its healthcare system it is not all going to change in a three-month time, and we spent a lot of time trying to take not only the bigger companies in the industry but the smaller companies in the industry, and help take advantage of these trends towards attracting and retaining patients. as a core competitive advantage, and understanding how to produce better healthcare consumers. and hopefully we are trying to move the ball down the field so thank you very much. >> we are so lucky to have you and everyone speak here. i wrote case studies about their companies, and i wrote 53 other case studies, two silver

and net education about how to make healthcare innovation happen. so, there is a lot of should teach and you should do this, you should do that, you cannot do this, you cannot do that, but how should you actually make it happen, actually it is a very hard subject to teach. because entrepreneurs do not know healthcare, they are terrified that people like you will be in the room, and then healthcare people by and large do not know entrepreneurship, so i am grateful for you for not only being here but for participating in these case studies. we have one minute tony and tom, for you to comment on the impediments, or the changes in policies that would make things better. one minute. tony? >> so, well, one do not legislate plan design, let the market figure out plan design, i think we were the innovators in hr, the first thing we did on the hra back in 98 was what

they are doing is illegal, so it shows you that we have an uninformed group of people, now has marketshare, and the market, i think we did talk about this idea of data, i think that regulatory thing, we should not tolerate this anymore at the consumer level, this idea that a plan, that somebody gets to keep your data inhibits the problem by the way so remember, people do not realize that hippo, it is the consumer, they can actually say we have to break that down so, anything we can do regularly there, i think will be hubble.>> tom. it is similar to sort of the experience and is the patchwork of regulation at the state level, so as we look at how we can advance healthcare, there are professionals who can do a lot more than they currently allow to do, as a pharmacist, nurse practitioner or others, so getting them to practice at the top of their license is using importing solving for the current prices, we have to go state-by-state to make that

happen and so, the more we can get to a standardization around this i think the more we can accelerate healthcare more broadly. >> so, rajiv bhatt, neil, you told us about how all of this would make your efforts better, i am grateful to all of you, you have been marvelous. tom, are you going to introduce the secretary? >> we are going to have a short transitional break. >> okay. great.